Gold M&A Heats up in West Africa
Will Perseus return with a higher offer for Predictive Discovery?
The past few weeks has brought a renewed flurry in activity in the small West African gold space.
In October, Robex Resources (TSXV: RBX/ASX: RXR) and Predictive Discovery (ASX: PDI) have agreed to merge to create an emerging Guinea-focused gold producer with an implied market capitalisation of A$2.35 billion, or C$2.16 billion.
The deal will combine Robex’s Kiniero project in Guinea, which is on track to pour first gold this month and is expected to produce an average of 139,000 ounces of gold per annum over nine years, and PDI’s neighbouring Bankan development project, which is expected to produce 250,000ozpa over more than 12 years.
The two companies agreed to a merger of equals via a Quebec plan of arrangement with PDI offering 8.667 shares for every Robex share held, giving PDI shareholders 51% of the combined entity.
However, earlier this month, PDI’s 17.8% shareholder Perseus Mining (ASX/TSX; PRU) announced a superior scrip offer of 0.136 Perseus shares for every one PDI share held, valuing PDI at A$2.1 billion.
Perseus also offered to loan PDI A$37 million to cover any termination fee due under the Robex transaction.
The board of PDI deemed Perseus’ offer as superior though Robex had five business days to match it as per the merger agreement.
On Thursday, Robex announced it had reached agreement with PDI to amend the merger so that its shareholders would receive 7.862 PDI shares for each Robex share held, increasing PDI shareholders’ stake in the enlarged entity to 53.5%.
As a result, PDI said it no longer deemed Perseus’ offer as superior.
Robex shareholders representing around 23.8% have agreed to back the revised merger. A meeting to vote on the deal was rescheduled from December 15 to December 30.
Will Perseus return?
Perseus noted the revised merger agreement and formally terminated its offer.
However, many believe that may not be the end of it.
Analysts from Citi had previously suggested Robex would have to concede 63.5% of the enlarged entity to trump Perseus’ offer.
PDI shares slumped by as much as 12% on Thursday.
Euroz Hartleys analyst Mike Millikan said while the Perseus offer appeared to provide higher upfront value on an issued scrip basis, it clearly had not received the support of major PDI shareholders.
“It will be interesting to see how Perseus responds to the latest revised PDI-RXR merger plans,” he said.
“The revised PDI-RXR merger plans provides PDI shareholders with higher MergeCo interest, and RXR shareholders slightly diluted interest (~49% to ~46.5%), but it should be noted that larger shareholders are on both sides, hence similar outcome.”
Perseus, which operates gold mines in Côte d’Ivoire and Ghana and is building a mine in Tanzania, reported cash and bullion of US$837 million as of September 30, plus liquid listed securities of US$134 million.
“We see Perseus as still having further potential capacity to come back with an improved offer before the 30th December vote,” Argonaut analyst Patrick Streater said.
Further consolidation
In late November, emerging Côte d’Ivoire miner Montage Gold Corp (TSX: MAU) agreed to acquire explorer African Gold (ASX: A1G) in a scrip deal which values A1G at US$170 million, a 50% premium.
It comes after Montage acquired a 17.3% stake in A1G in March and the pair formed a strategic partnership over A1G’s Didievi project in Côte d’Ivoire.
Didievi has a resource of 989,000oz at 2.9 grams per tonne gold.
Montage is building the Koné project in Côte d’Ivoire, which is expected to produce 300,000ozpa of gold from Q2 2027.
“With the build of our Koné project tracking on budget and well on schedule, we are pleased to further enhance our portfolio through the addition of the high-quality Didievi project, thereby strengthening our presence in Côte d’Ivoire,” Montage CEO Martino De Ciccio said.
The deal will require approval from A1G shareholders, with a meeting expected to be held in April.
The transaction is expected to close by late April 2026.
Earlier this year, Aurum Resources (ASX: AUE) completed the takeover of Mako Gold to combine the Napié and Boundiali gold projects in Côte d’Ivoire.
Majors selling
This year saw the major miners further retreat from West Africa.
Late last year, Newmont Corporation (NYSE: NEM) announced the sale of its Akyem operation in Ghana to Zijin Mining Group Co (SH: 601899) for US$1 billion, a deal which closed in April.
The asset was among those spun out to Zijin Gold International (HK: 2259) in October.
In April, AngloGold Ashanti (NYSE: AU) agreed to sell its interests in the Doropo and Archean-Birimian projects in Côte d’Ivoire to Resolute Mining (ASX/LSE: RSG) for up to US$175 million in staged payments.
On Monday, Resolute released an updated definitive feasibility study for Doropo, which confirmed the positive economics of a US$516 million, 13-year operation to produce 170,000ozpa of gold at all-in sustaining costs of US$1406 an ounce.
Meanwhile, AngloGold and Gold Fields (JSE: GFI) had been working on a proposed joint venture to combine AngloGold’s Iduapriem and Gold Fields’ neighbouring Tarkwa mines in Ghana.
In May, the companies said discussions would be paused to allow focus on their respective standalone operations.
In September, Kinross Gold Corporation (TSX: K) sold its 5.2% stake in Ghana gold miner Asante Gold Corporation (TSXV: ASE) for C$73.1 million.
In October, Barrick Mining Corporation (NYSE: B) announced the sale of its Tongon gold mine and exploration properties in Côte d’lvoire to the private Pan-African company Atlantic Group for total consideration of up to US$305 million.
The consideration comprised US$192 million cash, including a US$23 million shareholder loan repayment within six months of closing, and contingent cash payments totalling up to US$113 million payable based on the price of gold over 2.5 years and resource conversions over five years.
The deal closed earlier this month.
What next?
Turaco Gold (ASX: TCG), owner of the 4.1Moz Afema gold project in Côte d’Ivoire, is considered a takeover target.
SCP Equity Research analyst Justin Chan expects the company’s Q1 2026 resource upgrade to take inventory beyond 5Moz of gold.
“With strong jurisdictional attributes and access to cheap grid power, we see Afema moving to the top of the development pyramid just as the West African M&A space is heating up,” he said this month.
In light of Montage’s offer for A1G, two Australian firms initiated coverage of explorer Many Peaks Minerals (ASX: MPK) this month, both with speculative buy ratings.
The pre-resource explorer owns the Ferké gold project in Côte d’Ivoire.
Euroz Hartleys analyst Michael Scantlebury has a A$1.38 price target for the junior, against Monday’s closing price of A87c, based on his expectation of a potential mineral resource at Ferke of 1Moz, at a valuation multiple of A$220/oz.
“We note that A1G is currently under a takeover offer which implies circa A$340/oz look through value; at this multiple MPK would be worth A$1.98/share,” he said.
“It is not often you can buy a gold development story capable of producing plus-100,000ozpa for circa A$100 million market cap.”
Canaccord Genuity analyst Paul Howard has a A$1.85 price target.
“Given the recent moves among mid-capped producers/developers and investment groups in taking strategic positions in emerging African explorers, we do not write off a strategic partnership evolving in Many Peaks,” he said.
Howard also initiated coverage of Aurum with a speculative buy rating and price target of A$1.50.
Montage acquired a 9.9% stake in Aurum in May as part of a A$35.6 million placement, which also saw the Lundin family take 9.9% and Zhaojin Mining take 8.5%.
Aurum’s management previously ran Tietto Mining, which was acquired for A$730 million last year by Zhaojin.
Guinea-focused explorer Sanu Gold Corporation (CSE: SANU) is also considered a takeover target due to its stacked share register.
In September 2024, AngloGold and drilling contractor Capital (LSE: CAPD) took 14% and 10% stakes, respectively, in Sanu.
That was followed in December 2024 by Montage acquiring 19.9% of Sanu and the Lundin family acquiring up to 10%.
In April, all four shareholders participated in Sanu’s C$12 million placement.